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Nuclear Waste: Extremism in defense of federally-paid jobs is no vice in South Carolina

Former Ohio Rep. Dave Hobson. Hobson abandoned his effort to halt construction of the MOX plant, in the face of intense lobbying by the Department of Energy, the Bush administration, and fellow congressional Republicans.Sarah Whitmire/Center for Public Integrity

Lawmakers shed their fiscal conservatism to appease local politics and keep a troubled nuclear plant alive at Washington’s expense

Introduction

A federal nuclear fuel factory project in South Carolina that experienced billions of dollars in cost overruns has been kept alive by the aggressive support of the South Carolina congressional delegation, which includes many professed fiscal conservatives.

Supporters have received millions of dollars in campaign donations from firms with a financial stake in the project.

Those firms have also conducted a successful, $6 million lobbying effort on the plant’s behalf in the past two years.

Under a unique arrangement, Washington may have to pay a fine of up to $100 million a year to South Carolina if the plant is not opened, giving the state’s politicians added leverage in the ongoing debate over the project’s future.

December 16, 2015

December 16, 2015

Before retiring from Congress four years ago, David Hobson, a powerful subcommittee chairman, says he couldn’t fathom why the Energy Department was so determined to build a multi-billion dollar plant in South Carolina for transforming plutonium into fuel for U.S. nuclear reactors.

Although the plant was billed as a noble arms control initiative, meant to dispose of the plutonium so it could not be used in weapons again, Hobson was troubled by its billions in cost overruns, a lack of demand for the reactor fuel, and the existence of cheaper alternatives.

Hobson, now 76, said in an interview that he concluded the project had three real aims: It was a multi-billion dollar jobs program for South Carolina, a Bush White House political gift to then-Gov. Mark Sanford and the state’s mainly Republican congressional delegation, and the potential kickoff of a much more ambitious and costly enterprise meant to benefit the nuclear industry.

None of those justifications appealed to Hobson, a Republican from west of Columbus, Ohio, that the Almanac of American Politics once described as “a practical-minded politician” with a steady demeanor at the helm of the House appropriations subcommittee on energy and water. But they reflected the heavily political impetus for the project, which so far has survived billion-dollar cost overruns, a series of construction snafus, and revisions to its goals that call into question whether the effort will shrink the risks of plutonium’s misuse.

In 2006, Hobson recalls, he abandoned his effort to halt construction of the plant, in the face of intense lobbying by the Department of Energy, the Bush administration, and fellow congressional Republicans. “It should never have been done,” Hobson said about construction of the so-called Mixed-Oxide (MOX) fuel plant at the Savannah River site. “I tried to kill it, but I was pressured not to.”

Officials in the Bush administration, Hobson explained, said the project was vital to Sanford’s re-election that fall. “I was told [that killing] it would hurt his chances of getting elected,” he said. They said that after the election, he could “do what you’ve got to do,” he recalls. So, he says, he reluctantly agreed to back down. Hobson did not say who contacted him, but his account was separately confirmed by a former aide.

The MOX fuel factory rising in the piney woods near rural Aiken, S.C. sounds a lot like the kind of mammoth federal public works project that fiscal conservatives say they love to hate: Experts say it will cost at least $20 billion to build and run over its lifetime. It employs 2,100 skilled workers, many of them union members, and has burned through at least $3.7 billion in federal construction funds. But it is nowhere near completion and some doubt it will ever be finished.

The MOX plant has survived threats before, howeever, thanks to the ardent support of a handful of powerful public officials in South Carolina and their allies in Congress, including some leading deficit hawks who publicly scorn earmarks.

Many in the state’s Congressional delegation have benefited from a stream of campaign donations by major companies with a financial stake in the project, and have been lobbied by former government officials and ex-congressional aides on the contractors’ payroll.

While the Obama administration wants to slash planned spending on the plant by half next year and maybe eliminate it in 2015, citing a history of mismanagement and budget troubles, the Palmetto State’s politicians in the past have proven adept at keeping MOX alive by making the prospect of cancellation as painful as possible.

At a critical early juncture, the State’s Democrats helped keep the MOX plant from foundering. Crucial support was provided as construction began by James Clyburn, D-S.C., then-House Majority Whip, whose district includes part of the Savannah River site, and by then-Rep. John Spratt, S.C., a senior Democrat on the House Armed Services committee and, from 2007 to 2011, chairman of the House Budget Committee.

Clyburn, after beating back Hobson’s efforts to halt the program, said in a May 2007 press release: “I am pleased to have worked closely with John Spratt to secure the funding to move this [MOX] project forward…[It] was a priority of mine while serving on the Appropriations Committee, and I am pleased they responded to my insistence that the funding remain in this year’s appropriations bill.”

His efforts didn’t go unnoticed. “When it comes to nuclear power, Jim Clyburn is always on our side,” Robert Eble, a nuclear safety manager from Shaw Areva Mox Services, the firm that is designing and constructing the MOX factory, told The New York Times in 2010. Eble was explaining the firm’s repeated financial donations to an annual golf tournament organized by Clyburn, now the House assistant minority leader.

More recently South Carolina’s Republicans have played an even bigger role in the effort, with none more crucial than Sen. Lindsey Graham, R-S.C., who once represented the town of Aiken, near the Savannah River site, as a member of the House.

Graham has emphasized his credentials as a deficit hawk, and on Jan.1, he said that “the time has come for the President to face up to the need to control federal spending.”

For many in Congress,however, such sentiments apply to spending in other states, not at home. For a month this spring, Graham blocked confirmation of the president’s nominee for energy secretary, Ernest Moniz, because Moniz refused to promise that the MOX plant — now six billion dollars over its initial budget—will be finished. Under pressure from colleagues, Graham relented and let Moniz start his work, but the lawmaker pledged to carry on his fight in other ways.

During an April hearing of a Senate armed services subcommittee, Graham reacted with icy intensity when Anne Harrington, deputy administrator for defense nuclear nonproliferation at the National Nuclear Security Administration, tried to defend what she called the White House’s “assessment pause” while cheaper alternatives are studied.

“MOX remains clearly on the table,” she said.

“Ms. Harrington, I just don’t — I don’t mean to be rude,” Graham replied. “And you’re a very smart lady. It’s not on the table. It’s the pathway forward. It’s not subject to debate.” Graham said he also pressed the issue in a late April phone call with Denis McDonough, President Obama’s chief of staff. A White House spokeswoman declined to elaborate on the substance of the call.

Support from “deficit hawks”

Former Sen. Jim DeMint, R-S.C., a fiery promoter of the Tea Party’s fiscal conservatism, has also quietly supported the MOX project. While touring the site in May 2009, DeMint declared that “Savannah River Site is at the center of the nuclear renaissance,” according to an Associated Press account.

In April, a week after DeMint – who resigned his Senate seat this spring – became president of the conservative Heritage Foundation, its web site published an article entitled, “Mixed Oxide Fuel Facility in South Carolina Needs Congress’s Support.” Asked to explain, Jack Spencer, the article’s co-author, said through a Heritage spokesman that DeMint neither requested the article nor influenced its message.

Former governor Sanford, elected to Congress on May 7, has long backed the plant despite his carefully cultivated reputation as a critic of government spending. Although in 2009 he spearheaded a losing legal battle to block federal stimulus funds for his state, Sanford embraced the multi-billion dollar MOX project. “He sees it as an opportunity for Savannah River to have a new mission,”a Sanford spokesman told the Associated Press in 2003.

DeMint’s replacement in the Senate, former Republican congressman Tim Scott, has been described as “a fighter for limited government” by the president of the Club for Growth, a group dedicated to cutting federal spending. “We must also eliminate Pork barrel legislation,” the group declares on its website. “No more bridges to nowhere!” In an April statement, Scott called the White House search for a cheaper alternative to the MOX plant “irresponsible.”

Rep. Joe Wilson, R-S.C., whose district includes part of the Savannah River site, claims the White House’s stimulus spending has achieved nothing except “growing our national debt.” But when rumors circulated early this year that the administration might slash MOX, Wilson – along with Clyburn and the rest of South Carolina’s House delegation — wrote to Obama warning of the “additional and unnecessary” proliferation risks if the project was suspended.

Sitting in the airport lounge in Columbia, S.C., Tom Clements of Friends of the Earth, a longtime critic of the MOX plant, reflected on the irony of fiscal conservatives rushing to the rescue of a big government, job-generating project like the plutonium plant. Clements noted that the company with the contract to build and operate the MOX plant is now a joint venture of two European companies, one based in France and the other in the Netherlands — albeit with many American workers on their payrolls. Both are countries with left-leaning governments.

“These are cheese-eating socialists who are [building] the MOX program, and Graham’s in bed with them,” Clements said with a sly grin. Then, referring to the other South Carolina Republicans who support the plutonium plant, he added: “They’re posing as fiscal conservatives, but in fact they’re big spenders.”

Graham, Sanford, Scott, and DeMint declined to comment on that claim. Wilson said he supports the plant because it is in “our national interests.”

Hobson now says that the soaring costs of the MOX plant have vindicated his opposition. “You go back and look at the hearings,” he said. “Everything I said would happen has happened. All that’s come true. And there is no end in sight.”

At one of the hearings he chaired, in April 2008, Hobson complained that “we went forward and did this deal…[because of] some deal that the Secretary [of Energy] made and the president made to give jobs to South Carolina.” Samuel Bodman, the energy secretary then, did not respond to requests for comment, but his former chief of staff said allegations that Bodman pressed a political agenda were “absurd.”

Sen. Lindsey Graham, R-S.C.

Susan Walsh/AP

Former Sen. Jim DeMint, R-S.C.

J. Scott Applewhite/AP

A contractor’s adroit lobbying

It’s hardly surprising the MOX project is popular in South Carolina. The region near the Savannah River site is a sea of prosperity in a rural corner of the state. The roughly 11,000 workers at the site enjoy an average income more than double that of their neighbors who work elsewhere, according to a May 2011 study by the University of South Carolina at Aiken.

An industry-funded group, Citizens for Nuclear Technology Awareness in Aiken, holds “Up and Atom” breakfasts, sponsors golf tournaments and each year there is an Atomic City Festival in New Ellenton, a town close to the site entrance.

Aside from proliferation concerns, South Carolina politicians have a strong political motive to support the MOX project. But they and their allies in other states have also benefited from campaign donations by companies with a financial stake in the project.

Shaw Areva Mox Services LLC, which is designing and building the MOX plant, until this year was a joint venture between the Shaw Group and Areva SA, the French government-owned international nuclear giant. Shaw, based in Baton Rouge, La., was purchased in February by the Netherlands-based Chicago Bridge & Iron NV – which now controls 70 percent of the MOX project.

Since 2003, Areva’s employees and the political action committee formed by its U.S. subsidiary have contributed at least $582,000 in campaign donations, an analysis by the Center for Public Integrity of donations listed by the Center for Responsive Politics revealed. Chicago Bridge and Shaw Group’s employees and committees have provided at least $2.2 million.

In total, donors from Shaw, Areva, and Chicago Bridge spent at least $416,000 of this amount on members of the four committees that control spending on the MOX plant. Among South Carolinians, Lindsey Graham’s campaign and leadership committee received $41,500, Wilson’s received $26,000, and DeMint’s received $5,000. Scott, who was first elected to Congress in 2010, received $5,500 for his campaign.

Three other South Carolina Republicans received a total of $39.500 from the same donors for their campaigns after 2002. Areva, Shaw, and a law firm that lobbied for the plant on Areva’s behalf also contributed $40,000 to Clyburn’s golf charity from 2008 to 2012. Political action committees controlled by Shaw and Areva contributed a total of $51,000 to Clyburn’s campaign and leadership committee and $41,500 to Spratt after 2002. Clyburn’s spokeswoman Hope Derrick, said, the lawmaker “is solely motivated by the best interests of the people and communities he serves in Congress.” Spratt, in a telephone interview, similarly said the contributions had not influenced his support.

A spokesman for DeMint said the donations did not affect his policy positions, while Graham and Scott did not respond to requests for comment.

To advance their interests on Capitol Hill since 2001, the Shaw Group, Shaw Environmental and the Bethesda, Md.-based U.S. arm of AREVA – also spent at least $21.1 million on both in-house and outside lobbyists, according to disclosure forms. Many of their lobbyists held earlier jobs in Congress or federal agencies, and pursued multiple interests for their clients.

But in the last three years alone, Areva and Shaw have spent at least $6.3 million on lobbying, including efforts by at least four former congressmen and some former committee staffers that advocated spending on MOX and related nuclear issues, according to an analysis by the Center for Public Integrity.

The project’s lobbying team has included several heavy hitters: former Sen. John Breaux (D-La.), who left Congress in 2005; Leonard Bickwit Jr., general counsel to the Nuclear Regulatory Commission from 1979 to 1983; and Linda Ann Lingle, the Energy Department’s former top liaison to Congress.

Lingle, who was paid $80,000 by Areva last year, said the company ramped up its lobbying after Hobson attempted to kill the MOX project; her responsibility, she said, was to promote the project to South Carolina and Georgia politicians so they could be better advocates. The support of the South Carolina delegation in Congress, she said, was “very important” to keeping MOX alive.

Spencer Abraham, who was President Bush’s Energy Secretary when the department abandoned a major alternative to the MOX plant in 2002, became the non-executive chairman of Areva’s U.S. arm after leaving government. He told The New York Times in 2011 his role was “largely advisory.” His consulting company announced he quit that post in January 2012, citing other responsibilities. He did not respond to a request for comment.

A Shaw Group subsidiary, Shaw Environmental and Infrastructure, last year also hired three savvy Capitol Hill veterans at the international law firm K&L Gates to lobby for the MOX plant: Slade Gorton, a former senator from Washington who sat on the Senate’s Appropriations and Energy Committees; James T. Walsh, a former House member from New York who served on the Appropriations Committee; and Tim Peckinpaugh, a former staff member of the House Science Committee.

Gorton signed a March 10 op-ed article for the Tri-City Herald in Washington state defending the MOX project, saying there remained a “very clear danger” that nuclear materials could fall into the hands of terrorists. “Some want to delay this important plutonium disposition, which would be a critical mistake,” he wrote.

Gorton did not mention his work for Shaw in the piece, which was excerpted on Areva’s website. Asked why, Gorton said that at the time it was published, he was only a consultant to K&L Gates, and wasn’t aware of which client had requested the article: “I don’t even know who their client was. They [K&L Gates] asked me to do it.”

Walsh did not respond to a request for comment. Peckinpaugh declined to discuss his work.

South Carolina Gov. Jim Hodges, right, gestures as he talks with Boykin Rose, Director of the Department of Public Safety, center, and Col. Mike Kelley of the South Carolina Highway Patrol, front left, as they conduct a drill in April 2002 to stop trucks carrying plutonium from entering Savannah River Site.

Mary Ann Chastain/AP

A way to make Washington pay

MOX plant supporters and contractors have additional leverage. When plans for the MOX plant were first hatched, South Carolina worried about becoming a dumping ground for U.S. plutonium. It agreed to host the plant only after Washington promised the plutonium would eventually leave the state in the form of fuel.

From the outset, South Carolinians worried this promise could be broken, and in 2002, then-Gov. Jim Hodges, a Democrat, threatened to lay down in front of any trucks bringing plutonium to his state. “I asked, ‘What happens if MOX does not work? We’re stuck with it,’” he recalled. “They never did provide a rational answer to that question.”

Hodges’ threat provoked local supporters of the deal to nickname him “Governor Speedbump.”

Then-Rep. Lindsey Graham and then-Sen. Strom Thurmond (R-S.C.) responded to the state’s concerns by securing congressional approval for a unique system of fines: Washington would pay South Carolina $1 million a day – up to $100 million a year – if the MOX plant did not begin producing a ton of plutonium-laced fuel a year by 2009.

Graham has since twice inserted revised language into atomic energy legislation delaying those fines until 2016. “Last year they were off track in terms of the timetable, but I sat down with the Obama administration and said, ‘Listen, we don’t want the $100 million, we want the MOX facility,’” Graham said at the April subcommittee hearing. “And so we extended the time period for two years. I can assure you I would not have done that if I’d known this year in the president’s budget they would be suspending the MOX program for study. We have studied this thing to death. It is now time to get on, and getting it built.”

Graham’s view resonates at the National Nuclear Security Administration, which oversees the plant and remains wedded to it. NNSA officials sought to increase spending for it by 47 percent in 2014, according to internal DOE budget documents. But policy officials at the Defense Department, including Deputy Secretary of Defense Ashton Carter, urged instead in private interagency meetings that the MOX plant be scrapped, and its budget shifted to modernizing nuclear warheads, according to participants in the deliberations.

After a series of high-level meetings, Obama administration officials reached a compromise: They would reduce funding now, spend $320 million more to keep the plant’s construction going for another year, and study cheaper alternatives.

Asked about the $100-million a year fines looming over any cancellation, NNSA spokesman Joshua McConaha said “we understand our commitments under current legislation, and we will look to ensure compliance with the law.”

When Graham agreed on May 15 to lift his hold on Moniz’s nomination, he did so without gaining a promise that the project will be completed. Instead, he released a joint statement with three other Republican senators — Tim Scott, Saxby Chambliss (Ga.), and Johnny Isakson (Ga.)—vowing to hold up other nominations and use the budget process “to ensure the program moves forward.”

Speaking of the administration’s desire to reduce the project’s funding and pursue potential alternatives, they said “we will not allow this ill-conceived plan to proceed.”

Data editor David Donald and data reporter Alex Cohen contributed to this article.